Secrets of Singapore

The last time I visited Singapore, I stayed at the charmingly run-down, distinctly colonial Raffles Hotel. I drank a Singapore Sling in the Long Bar, contemplated a well-fed cockroach in my room and fancied myself to be following in the footsteps of Somerset Maugham. It was more than 30 years ago. I felt like Milord Anglais, making my tour around the still pretty exotic Far East.

Well, that’s all gone. Visiting again earlier this month I found a Singapore so prosperous that any possible sense of effortless and, of course, undeserved superiority has been replaced by something close to the opposite. The place is so successful, in so many ways, that I felt like a visitor from a decadent old country on a trip to one that had surged ahead.

I can’t afford the Raffles any more. It has been spruced up and is out of my league. I stayed in a hotel slightly away from the best part of town and still winced at the cost.

Just flying across the country gives you the first indication of what has happened. The port is now enormous, with hundreds of stacks of containers across a vast area that look like part of some computer game: Build-a-port, perhaps. Singapore is one of the three biggest ports in the world, vying with Rotterdam and Shanghai.

Its GDP per capita has overtaken that of Britain according to the World Bank, the IMF and the CIA World Factbook, each of which has a different way of measuring. Yet still it grows. Last year it was up another 5 per cent. Meanwhile Britain desperately tries to avoid a double-dip recession. The contrast is stark.

And here is a newspaper headline that you won’t see in Britain any time soon. Every country is suffering from dreadful economic conditions, right? Here’s the headline: ‘Jobless rate falls to 14-year low’. It was in the Straits Times earlier this month. The latest fall in unemployment brings the proportion out of a job down to 2 per cent. Meanwhile the average salary of Singaporeans has risen by 6 per cent in the past year.

Keynesians — in the corrupted sense of ‘those who believe in yet more deficit financing whenever there is an economic problem’ — may well assume that the government has splurged to achieve this remarkable result. Not at all. Here is another headline from the Straits Times: ‘Government surplus “to exceed forecast”.’

So how does Singapore do it?

Well, opinions will differ but since we have ruled out deficit financing as a possible explanation, we might try considering balanced budgets as a possible factor. Singapore has balanced its budget over the past 15 years. The deputy prime minister, Tharman Shanmugaratnam, who is also the minister of finance, told me that it had been made part of the constitution. Following the 2008 crisis, he had been obliged to apply for special permission to run a temporary deficit but this has already been paid back. Obviously having no burden of massive net public debt means that there is no net interest to pay and no need to raise taxes to pay it.

On the subject of taxes, here is another big difference: if you are on average earnings, you pay no income tax. That’s right: none. Which brings the advantage that the average person and, of course, all those on lower incomes, receive every cent that an employer pays them. This is in stark contrast to Britain, where there is a big wedge between the cost of employing someone and the money the employee actually receives after tax and national insurance. That sort of wedge probably contributes to our considerably higher unemployment.

And here is another thing which probably helps. There is no minimum wage. So, yes, there are some people on low wages. But — to put it the other way round — there is nobody in Singapore who wants to work and is offered a job who is prevented by the government from taking it. The labour market is flexible and, surprise, surprise, it works as markets often do if they are not interfered with. There is surely a case for saying that a low-paid job is better than living on ­benefits.

Singapore is second only to Hong Kong in the world index of economic freedom composed by the Heritage Foundation. Britain, in case you are wondering, comes 14th — which at least is better than France.

Instead of having national insurance, Singapore has compulsory saving. Rather frustratingly, they got this system from us. It now takes the form of payments into the Central Provident Fund. Employers and employees both pay into the accounts for each individual. This is a personal fund and one gets statements showing how much is in one’s fund. The saving is matched by investments. So it is very different from the British system where you pay your national insurance but you have no personal fund. You are also not imposing a burden on the next generation.

One of the advantages is that when money is taken out of your earnings for your pension, you feel it actually remains yours — even though you can’t spend it straight away. It does not feel like money down the drain

•••

The approach to education is rather more realistic than in Britain. Here we have had the politically convenient fantasy that all young people should do A-levels and half of them should go to university. More farcically still, many politicians appeared to believe that by more people going to university and reading, say, English literature, the economic performance of the country would be improved. But Singapore, like another country with low unemployment, Switzerland, embraces vocational education. At the age of 16 or 17, many teenagers — instead of preparing for university — start at educational establishments designed to lead to a job. There are polytechnics and institutes of technology. Polytechnics, of course, are another kind of institution which Singapore got from the British.

So, too, are O-levels. They still take them. For younger readers who have never heard of the things, they are the exams that people used to take in Britain before they were replaced by the less exacting GCSEs.

I visited one of the primary schools. I am afraid I was a bit late. That is particularly bad manners in Singapore as there is a good chance that a reception committee is waiting for you. I was ashamed to find that there were about five teachers who had been clicking their heels along with 40 children who proceeded to sing me a medley of songs. The children were in three neat rows and sang well. They take part in international competitions. And lest you think this was an elite school, it was not. It was a ‘neighbourhood’ school with 20 per cent of the children receiving free meals. Above their heads in the dining room hung boards with qualities they were encouraged to aim to be: ‘RESILIENT’, ‘STRIVING’ and ‘AMBITIOUS’.

Perhaps that sounds a bit Big Brother-ish. Yes, Singapore certainly is that. I visited one of the older generation of housing estates. As I wandered around two tower blocks for over an hour, I could not discover a single piece of graffiti or, indeed, rubbish. I asked someone later whether this was because of pride of ownership or fear. ‘Fear,’ he replied. The ultimate punishment for graffiti is the cane. Incidentally, that is another thing we in Britain used to have. But there is surely some pride of ownership, too. The majority of Singaporeans do not rent their social housing. They buy it. Acquiring a home is one of the things that you can do with your compulsory savings ahead of retirement. Consequently, Singapore has the highest rate of home ownership in the world. It is argued that it gives people a stake in society and assets of their own. The system is one of compulsory self-reliance which may well be better than the British system — for the bottom strata of society — of compulsory dependency.

Of course
, the place is not perfect. It takes some bravery to be openly in opposition to the People’s Action Party, which has governed for over 50 years. If there is anything you can possibly be charged with, you probably will be. One person I interviewed told me that he was followed and that if he went into politics he would be arrested. The press is very tame. If you think that the British press is awful in the way it makes things up, harries individuals and invades privacy, you might nevertheless think it even worse to have a press which dutifully toes the government line.

There is no way that I recommend the kind of control exercised by the PAP. Yet it must be acknowledged that its control is just beginning to be slackened a little. The opposition did better than ever before in last year’s elections. Also the PAP government has become somewhat softer than before — both in its policies and its treatment of opponents. It must be admitted that its control has in many ways been benign. The big question for the long term is whether the extremely successful economic policies the government has pursued will survive the eventual arrival of a full, rambunctious democracy. Frankly it seems unlikely.

The question for us here in Britain is whether we can learn from the things that work in Singapore. In the end it will depend on what we really want. Is it to maintain the illusion that the consensus we live in is pretty sensible or to admit we got some things wrong — to admit that permanent mass unemployment is socially as well as economically damaging, for example. Singapore shows that there is another way. It is to go, instead, for low unemployment, higher growth and, through that, greater wealth and well-being for us all.

This article first appeared in the print edition of The Spectator magazine, dated March 3, 2012

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Tariq

Although not as pristine as Singapore, Canadian cities are remarkably free of litter and graffiti, and we don’t use the cane on anyone. In any event, there’s no point in looking to other countries for solutions to one’s own problems. This is why Steve Hilton’s Big Society hasn’t caught on: the UK isn’t California.

James holdsworth

How dare you write something like this, do you really think this is the right way to go? Come live on Singapore for a few years, without some huge xpat package which protects you from the reality. Witness the the human rights abuse, the way they underpay Indian, and Chinese, workers, and how they have problems receiving medical care, regular hangings. Try to see just why they are so successful, with a government who is totally in control of everything, the richest and highest paid in the world, and how, well really do your research before making such statements. So now you are giving the view that this is an amazing place. So naive

Aiden

I have lived in Singapore for more than 20 years and I love it here. Everyone, almost everyone, who needs a job has a job. Food are cheap and education, transport, housing are excellent. It is not true that the criminal law are oppressive. Come live here and see for yourself the level of freedom here and respect for human rights.

Jeff Smith

“The question for us here in Britain is whether we can learn from the things that work in Singapore.”

Here’s a few things to chew over:

Most of Singapore’s biggest and most successful companies are owned or controlled by the state.

Singapore’s ruling party, the PAP, runs most of the country’s kindergartens.

Only about 3.3m out of the 5.2m people who live in Singapore are Singaporean citizens.

James Holdsworth

Well Aiden it seems you are living in a completely different Singapore to me, I have also lived her for many years. Its is a fact that there are human rights issues here, undeniable. Its is also a fact that most Singaporeans are under paid, due to the fact that there is no minimum wage. Just look at the issues there are, concerning the small matter of giving a maid one day a week off, and working 16 hours a day for 15 dollars. And what about the issue of the Indian workers being paid 9 dollars a day, and then the problems with health care for such workers. And lets not forget the hanging of a young girl for smuggling drugs worth $2000-00. Oh and lets not forget that you cannot speak against the government, sorry yes you can, but then you will taken to court and stripped of everything you have. Sorry but what Singapore are you living in.

Jeff Smith

I have to say that, sadly, this article is a classic example of its genre. I’ve read this sort of superficial coverage so many times: a right-wing Western journalist flies into Singapore, is gobsmacked by how advanced it seems, sucks up the statistics about how free the economy is, and then asks ask why the West can’t be more like Singapore.

I think most Spectator readers would choke if they knew how the state controls and shapes most Singaporeans’ lives.

I hope Mr Bartholomew goes back to Singapore again and looks beyond the Potemkin village schools he visited.

V Tan

I agree with the comments except for Aiden’s. If Singapore is truly so great, i wouldn’t have left. Mr Bartholomew should do his research more thoroughly. See these blogs for reference:

Aiden you are not the only who live here and feel happy about it, but do you seriously commented fairly on the total scene of Singapore or are you benefitting from lopsided comments where you have not commented on the darker side of this PLACE IN THE PLANET.

Thomas

James, Honestly, I wouldn’t say Singapore is a perfect place either. But is there really such a thing?

Personally, I don’t have maid issues, I don’t really have pay issues, I don’t smuggle drugs, and I applaud the government for doing what it has done to get us to where we are now… I could currently be hauling sacks of rice off crappy boats along the Singapore river, like the older members of my family did back when we were still a fishing village, if it weren’t for the Govt’s foresight and the ambition to make this a better place. Yes, speaking against the government is highly discouraged… but that is changing and the government is learning from its mistakes… wish it could be a little faster in doing so but at least it is.

So my question to you, Mr James Holdsworth, is if it is so bad here, and assuming no one is forcing you to stay, why are you still hanging around? There has to be something to make you stay the length of time that you did.

James Holdsworth

You are correct it is not all bad in Singapore, but sorry Thomas, your comment is so typical of many in Singapore, if you don’t like it then why are you hanging around? If every one stopped telling the truth, then those changes that you mentioned would not happen. I have been and remain dedicated to the development of Arts and Culture, but people do need to speak up, and not bow down to a government that needs to do more with very important issues. Carry rice? Back to the Kampong? I think that is really a thing of the past, and very typical of propaganda thats making you feel grateful for what you have. My ancestors carried sacks of coal, does that mean I have to keep mentioning the fact, and have to be continuously grateful and ignore the surrounding problems that people are faced with? Obviously you are quite comfortable, and its ok for you to not look at the issues around you, but I am sure you will encompass the results of those that are committed to change.

Lionel Lye

I’m intrigued by the posts that ask for the pro-Singapore-government comments to see the other side — why aren’t the ones lambasting the government seeing that other side too? The original article is credible in its acceptance of the good that the government has done, and at the same time points out where it can do better. With regard to James Holdsworth, I happen to think like Thomas: If you are, in reality, as unhappy as your posts make you out to be, there really is nothing stopping you from packing your bags and leaving. (That’d take 1 unhappy foreigner away from the 3.3 foreigners in the 5.2 million city-state).

Don’t get me wrong: I’m not xenophobic. I value my expatriate friends, as much as I’m sure the rest of the world values Singaporeans in their countries. I happen to be dedicated to the development of Arts and Culture in Singapore too, and in fact am very much involved in the running of one of the premier amateur music groups — we value the government’s endorsement and support for what we are trying to do.

I think I speak for the silent majority in Singapore when I say that what we’re looking for, is not a radical change in government, but a continuation of what is good, and an improvement in the things that need improvement. We’re not blind to the improvements that can be made in maids’ lives, in construction workers’ lives, in toilet cleaners’ lives, but we’re also not naive to think that Singapore is a dystopia, which Mr Holdsworth seems to imply.

To those who doubt what I say, come, live in Singapore. I assure you it’s nowhere close to North Korea, which some comments seem to imply =p

Kevin

Greetings,

I am concerned about the polemic nature of our discussion here. While I agree that the article is certainly biased, and most exemplary of its kind – foreigner given a taste of the best – it is not wholly untrue either. Singapore is not perfect. I am born and bred here. Singaporeans have barely 50 years of independence. We may have been touted as an economic marvel, no one should be naive enough to say what has worked for us should be transplanted elsewhere without careful analysis. More importantly, economic development is, imho, much easier to engineer than social or political development. For all the expats, foreigners, even citizens, i must remind you that singapore is a made nation, made up of immigrants who came to look for a way to better their lives and go back to where they come from… but it takes many generations, many different trials and errors before a nation finds its own. Could singapore have developed the kind of sociopolitcal awareness and activism we see in the west? maybe… but to have to expect sociopolitical development to march side by side economic development would be naive and simplistic.

Singapore may be punching above its weight economically, or even in terms of its human resource development. But it is still a young nation, who is slowly finding its identity, its own brand of democracy – hopefully one that is more responsive to the people’s needs and voices, and definitely, Singapore will have much room for improvement in many areas.

JAX

After I recovered from my astonishment at this piece, I wondered how much the writer had been paid to pen it and admired his boldness for not bothering to do any research at all on Singapore before or after his visit before bashing out this superficial report full of factual mistakes and half facts on the country I was born in more than 6 decades ago.

I’m glad he noticed our busy port in the 5 seconds it takes to “fly across the country”. It’s a pity he didn’t notice the amount of greenery too. The drive down from the airport is particularly pretty – park and beach on one side, forest and golf course on the other.

A few points: The Finance Min didn’t need permission to Run a deficit, but to Borrow from our reserves, which are very large as we are very focused on making money.

We joke in our country that the acronym for our Institute of Technological Education stands for It’s The End. That’s where you go when you don’t do well academically. Blue collar work is something to be avoided here, because under the kind of meritocracy practised here, you cant rise unless you have a degree, no matter how good you may turn out to be. The pay is also poor. Eg, the salary of cleaners has dropped from $1,200 to about S$650 in the last decade.

80%+ of people here live in public housing (99 year leasehold) because that is all we can afford. These days though it has become quite unaffordable. A 1,200 sq ft public housing flat on the resale market just went for S$900,000 plus. You find yourself paying a mortgage for 30 years, and then, because a lot of it is from your forced retirement savings account, most people will not have enough to retire on.

The last time we were a fishing village per se was in the 19th century. Before the ruling party took over 50 years ago, there were good roads, schools, houses, public institutions etc. There were also kampongs, communities of spacious wooden houses where neighbourliness was a byword. These were cleared for devt, and the villagers put into small public housing flats. It was to give us a sense of ownership of the island.

It is good to know the writer thinks so highly of our govt. Right now we are upset with it because of the flood of foreigners – a million in the last 6 years – and many of us citizens are either losing our jobs to them or being forced to take jobs which pay too little for us to even exist here. Productivity has plummeted.

Since the infrastructure was not prepped for this flood (there was another million in the 1990s), besides the soaring prices of homes, we are also jumping up and down over the very high cost of living and healthcare (another Singapore joke is: Better to die than get sick), packed hospitals, congested roads and crushes on our public transport. We can however boast that our underground train system is truly first world – there are frequent breakdowns and the trains are slow and late, though our system is Much younger than London’s, like other developed countries.

The writer also forgot to mention that we have the highest Gini coefficient among developed countries, ie the gap between our rich and poor is the largest. As for our high median wage, it could be due to the fact that millionaires are flocking here. They love it as the streets are safe to walk in at night in almost all places, the education system is good, our taxes low – if you close your eyes to the Goods and Service Tax on everything; we have the highest electricity prices in the world; a certificate to own a car for 10 years starts at around $60,000, not including the car itself – and we dont ask questions about how they got all that lovely lolly.

Meanwhile, I must disagree with one commenter who seems to think its fine not to have manners and be socially stunted until and unless you have made it and are rich.